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Cypen & Cypen
NEWSLETTER
for
AUGUST 11, 2004

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. FLORIDA PREMIUM TAX DISTRIBUTION AMOUNTS RELEASED:

Trish Shoemaker has released the amounts available to be distributed to Firefighter and Police Officer pension plans. She has already requested initial distribution and expects checks to be available from the Comptroller by August 18, 2004. The total distribution for firefighters is $44,731,478.00 and for police officers, $61,544,848.00. Once again, our client City of Miami leads both packs: $4,397,903.00 (Fire) and $6,320,134.00 (Police). Read the entire list for firefighters at http://www.frs.state.fl.us/frs/mpf/2003_fire.pdf and for police officers at http://www.frs.state.fl.us/frs/mpf/2003_police.pdf.

.2. FORBES CALLS IT A “CONVICT’S 401(k) PLAN”:

Bernard Manko, who was sentenced to five years in prison for creating fraudulent U.S. Treasury Bill repurchase agreements, is seeking over $16 Million in refunds from the Internal Revenue Service. The 64-year-old Lighthouse Point, FL, man says IRS never properly assessed the tax owed on disallowed losses from hedge funds and also failed to apply a 1997 U.S. Tax Court ruling that he could settle his civil liabilities from the T-Bill scheme on the same basis as his innocent customers, who kept 20% of their challenged losses. One person scammed was Forbes 400 member John Kluge.

.3. FLORIDA SUNSHINE ACT APPLIES TO PRE-TERMINATION PANEL:

In a recent case we reported on (see C&C Newsletter for June 8, 2004, Item 6), a Florida appellate court found that the Florida Sunshine Act is applicable where a department head to whom the authority to discipline or terminate a county employee deliberates with a panel to determine whether to terminate the employee. Denying the county’s motion for rehearing, the appellate court limited its decision to the particular facts at bar. In addition, the court declined to certify to the Supreme Court of Florida a question of great public importance, because “we do not agree that this decision has the effect of bringing within the ambit of the Sunshine Act all consultations with staff made by government decision-makers.” Dascott v. Palm Beach County, Florida, 29 Fla. L. Weekly D1732 (Fla. 4th DCA, July 28, 2004). (On reh. den.).

4. IRS RELEASES MODEL AMENDMENTS FOR ELIGIBLE 457(b) GOVERNMENTAL PLANS:

IIRC Section 457 applies to nonqualified deferred compensation plans established by State and local government employers. Eligible plans are established pursuant IRC Section 457(b). The Economic Growth and Tax Relief Reconciliation Act of 2001 made changes to eligible Section 457(b) governmental plans, including increases in the elective deferral limits, repeal of rules coordinating Section 457 plan benefits with contributions to certain other types of plans, catch-up contributions for individuals age 50 or over, rollovers to and from various types of eligible retirement plans and transfers to purchase permissive service credits under governmental defined benefit plans. Rev. Proc. 2004-56 (26 CFR 601.201) contains model amendments. Any State or local government employer may amend its eligible Section 457(b) plan to comply with one or more of the changes made to Section 457 by the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, EGTRRA and the regulations issued under Section 457, by adopting one or more of the model amendments contained in the appendix to the revenue procedure. The model amendments conform with the applicable Section 457(b) requirements as to benefit provisions, taking into account the general requirement that an eligible plan must include all material terms and conditions for benefits under the plan. The regulations provide that an eligible Section 457(b) governmental plan may contain certain optional features not required for plan eligibility, such as in service distributions from rollover accounts, distributions for unforseen emergencies, loans, plan-to-plan transfers and distributions of smaller accounts to eligible participants. Accordingly, the model amendments contain optional as well as required provisions that may be used in adopting an eligible Section 457(b) governmental plan. The revenue procedure is viewable online at http://benefitslink.com/IRS/revproc2004-56.pdf.

5. CFA TEST TAKERS FAIL AT RECORD LEVEL:

According to a Bloomberg report, almost two-thirds of the 24,000-plus people who took the first level Chartered Financial Analyst exam in June failed. Since 1999, when the failure rate was 36%, rates have climbed steadily to their present 64% level. Many securities industry employers consider the CFA designation an essential credit. To qualify for level one of the exam (which is the first of three tests required for ultimate certification), a person must be employed in a financial job -- like broker or analyst -- and have three years relevant experience. Since 1964, an average of 48% taking the test have failed. Worldwide, there are 58,000 CFAs.

Copyright, 1996-2004, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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